Chapter 4
global analysis
Section 4.1
International Trade
Section 4.2
The Global Marketplace
Section 4.1
International Trade
CONNECT What international products do you
consume?
Section 4.1
International Trade
• Describe the benefits of international trade.
• Discuss the balance of trade.
• Compare and contrast three types of trade barriers.
• Discuss three significant trade agreements and alliances.
Section 4.1
International Trade
Nations rely on each other to provide goods
and services. This interdependence creates a
global marketplace.
Section 4.1
International Trade
• international trade
• embargo
• imports
• protectionism
• exports
• World Trade Organization (WTO)
• balance of trade
• North American Free Trade
• free trade
• tariff
• quota
Agreement (NAFTA)
• European Union (EU)
Section 4.2
International Trade
Key Concepts Related to International Trade
Section 4.1
International Trade
Key Concepts Related to International Trade
Section 4.1
International Trade
Nature of International Trade
Imports
International Trade
Exports
international trade
The exchange of goods and services between nations.
imports
Goods and services purchased from other countries.
exports
Goods and services sold to other countries.
Section 4.1
International Trade
Nature of International Trade
The principle of economic
interdependence is fundamental to
marketing in a global environment.
Section 4.1
International Trade
Nature of International Trade
Absolute
Advantage
When a country has economic resources that
allow it to produce a product at a lower unit
cost than any other country.
Comparative
Advantage
When a country has an absolute advantage in
more than one product.
Section 4.1
International Trade
Nature of International Trade
The Benefits of International Trade
Section 4.1
International Trade
Nature of International Trade
The Benefits of International Trade
Section 4.1
International Trade
Government Involvement in International Trade
Balance of Trade
Trade
Surplus
When a nation exports more
than it imports.
Trade
Deficit
When a nation imports more
than it exports.
balance of trade
The difference in value between
exports and imports of a nation.
Section 4.1
International Trade
Government Involvement in International Trade
Defining Trade Barrier Terms
Section 4.1
International Trade
Government Involvement in International Trade
Defining Trade Barrier Terms
Section 4.1
International Trade
Government Involvement in International Trade
The opposite of free trade is
protectionism.
free trade
Commercial exchange between
nations that is conducted on free
market principles, without
regulations.
protectionism
A government’s establishment of
economic policies that systematically
restrict imports in order to protect
domestic industries.
Section 4.1
International Trade
Government Involvement in International Trade
Subsidies accomplish the same
goal as protectionism.
Countries may retaliate for
protectionist actions.
Section 4.1
International Trade
Government Involvement in International Trade
Trade Agreements
and Alliances
World Trade Organization
(WTO)
North American Free Trade
Agreement (NAFTA)
European Union (EU)
World Trade Organization
(WTO)
A global coalition of nations that
makes the rules governing
international trade.
North American Free Trade
Agreement (NAFTA)
An international trade agreement
among the United States, Canada,
and Mexico.
European Union (EU)
Europe’s trading bloc.
Section 4.1
International Trade
Government Involvement in International Trade
Pros and Cons of EU Membership
Section 4.1
International Trade
Government Involvement in International Trade
Pros and Cons of EU Membership
Section 4.1
International Trade
Section 4.1
1.
Explain how countries benefit from international trade.
Increased foreign investment in a country often improves the standard
of living for the country’s people. Individuals have more options to
choose from when making purchasing decisions. Economic alliances
among nations often solidify political alliances that foster peace.
Section 4.1
International Trade
Section 4.1
2.
Distinguish between tariffs, quotas, and embargoes.
• A tariff is a tax on imports.
• A quota limits either the quantity or the monetary value of a product
that may be imported.
• An embargo is a total ban on specific goods coming into and leaving
a country (typically imposed for health or political reasons).
Section 4.1
International Trade
Section 4.1
3.
Describe the common goal or purpose of WTO, NAFTA, and
the EU trade agreements.
The common goal or purpose of WTO, NAFTA, and the EU trade
agreements is to reduce trade restrictions and increase free trade
among nations.